Muller vetoes 2015 tax cut in Lehigh County

Lehigh County Executive Tom Muller vetoed half a dozen Republican-backed budget amendments, saying they do not shrink the county deficit as touted, and are harmful to employees.

Lehigh County Executive Tom Muller vetoed half a dozen Republican-backed budget amendments, saying they do not shrink the county deficit as touted, and are harmful to employees. (APRIL BARTHOLOMEW / THE MORNING CALL)

Of The Morning Call

Why did Lehigh County Executive Tom Muller veto a tax cut?

Lehigh County Executive Tom Muller vetoed half a dozen Republican-backed budget amendments, saying they do not shrink the county deficit as touted, and are harmful to employees.

Democrat Muller described the line-item vetoes as modest compared to his broad veto powers, and said he resisted challenging further amendments as a peace offering to the GOP-majority board of commissioners, which passed the budget 7-2 last week.

"Frequently in the past … when I reached out with an olive branch it tended to come back as a sharp stick in the eye," Muller said, "so I don't know how it will fare."

To be sure, Muller faces now the tough task of shoring up support to sustain his vetoes. Every amendment passed with a veto-proof majority, and many passed unanimously.

"I'm hopeful we can turn a couple [of commissioners]," he said. "But we haven't started anything."

He announced in a news conference Monday afternoon that he's vetoing some of commissioners' most significant personnel initiatives capping wage increases, creating an incentive-based bonus plan for non-union employees and eliminating bonuses for longtime employees.

Muller took a bold but expected step, too, in vetoing a $1.25 million tax cut he called fiscally irresponsible, given the county's structural deficit, or ongoing imbalance of revenues and expenses.

Commissioners are likely to dispute Muller's accounting that eliminating those amendments will bolster the structural deficit, which he accused them of worsening.

For example, his math counts $350,000 in employee bonuses as a strike against the structural deficit, but ignores that the payout is only made if employees find $3 million in savings.

Commissioner Vic Mazziotti said he needed time to review Muller's presentation. "Unfortunately, he didn't share this with us ahead of time," he said.

Under Muller's plan, the county would take in about $105.5 million in property taxes and spend $111 million in property taxes, which make up just a portion of the overall budget. The budget would be balanced with $5.5 million from a stabilization fund.

The 27 amendments introduced by Republican commissioners cut spending or found other pockets of reserves within county coffers to reduce the amount coming from the stabilization fund.

Some ultimately reduce spending, and thereby reduce the 2015 deficit, while some arguably expand the structural deficit.

The spending cuts commissioners approved were enough to pay for the $1.25 million tax cut and take a bite out of next year's deficit. But if they're not ongoing cuts and only affect the 2015 budget, they may worsen the structural deficit.

The other amendments affected the other side of the ledger, as commissioners swapped funding sources but didn't eliminate spending.

"When you're moving money from one fund to another fund, you're not doing a darn thing about the deficit," Muller said after the news conference.

He vetoed an amendment sponsored by frequent foe, Mazziotti, that uses $900,000 in excess bond revenue — money Muller hoped would pay for upgrades at Cedarbrook Nursing Home — to pay down county debt.

He said a "variable compensation" program introduced by Chairwoman Lisa Scheller that rewards non-union employees for finding savings in the budget was setting workers up for failure. And a companion amendment capping 2 percent raises at $1,000 was no way to treat employees, he said.

Taking into account the wage cap, eliminated longevity pay and increased health care costs, Muller said, a 27-year employee making $40,747 would take home $436 less in 2015 than in 2014. A 23-year employee making $68,806 — the average employee wage is $52,000 — would take home $105 less.

Muller also struck down an amendment that sequesters $200,000 he needs to pay Cedarbrook's management company. The board passed it to force the executive to bring the contract in front of them if he wants to renew.